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BA3 Questions Bank

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Total 393 questions

Fundamentals of Financial Accounting Questions and Answers

Question 21

Refer to the exhibit.

Which three of the following would be classified as a revenue reserve?

Options:

A.

A, B and C

B.

D, E and F

C.

A, C and F

D.

B, D and E

Question 22

Financial controls are needed in order to:

Options:

A.

Reduce the cost of the external audit

B.

Ensure that the book-keeping system includes no errors

C.

Ensure that the management accounts are produced regularly

D.

Ensure that procedures are in place to minimize the risk of error and fraud

Question 23

A company which is VAT-registered receives an invoice for goods purchased for resale totaling $2,585 from a supplier that is not VAT-registered. VAT is at the rate of 17.5%.

The correct entry to record the invoice is:

A)

B)

C)

D)

Options:

A.

Exhibit A

B.

Exhibit B

C.

Exhibit C

D.

Exhibit D

Question 24

A company that is VAT-registered has sales for the period of $245,000 (excluding VAT) and purchases for the period of $123,375 (including VAT). The opening balance on the VAT account was $18,000 credit. The VAT rate is 17.5%.

What will be the closing balance on the VAT account at the end of the period?

Options:

A.

$6,500 debit

B.

$42,500 credit

C.

$375 debit

D.

$36,375 credit

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Total 393 questions